Determinants of Earnings Management in Primary Consumer Goods Companies in the LQ45 Index: The Role of Profitability, Liquidity, and Capital Structure 2 3
Keywords:
Profitability, Liquidity, Capital Structure, Earnings ManagementAbstract
This study aims to analyze the influence of profitability, liquidity, and capital structure on earnings management in primary consumer goods companies listed in the LQ45 Index for the 2020–2024 period. The background to this research is based on fluctuations in financial performance and indications of earnings management practices undertaken to maintain earnings stability and investor perceptions.
The research method used is quantitative with a multiple linear regression approach using secondary data from annual financial reports from nine sample companies selected using a purposive sampling method.
The results of the study indicate that profitability has a positive and significant effect on earnings management, liquidity has a positive and significant effect on earnings management, and capital structure has a negative and significant effect on earnings management. Simultaneously, these three variables significantly influence earnings management practices. The adjusted R² value of 0.713 indicates that profitability, liquidity, and capital structure explain 71.3 percent of the variation in earnings management practices in the sample companies.
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Copyright (c) 2026 Muhammad Taufiqurrohman, Ayu Nurafni Octavia, Emaya Kurniawati (Author)
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